Borrowing from your employer's retirement plan can be habit-forming — particularly for Americans in their 40s and 50s

That’s the conclusion Fidelity Investments drew when it examined the accounts of 180,000 people who participated over the past 12 years in one of the employer-sponsored 401(k) plans it administers.

Among this group, two-thirds of those who took out 401(k) loans are what’s known as serial borrowers — workers who borrowed money from their retirement funds more than once over that time period, Fidelity said when it first released its findings in August.

Dipping Into 401(k)s for College

Now, Fidelity is reporting who, exactly, the serial borrowers are.

On average, they’re middle-aged parents struggling to finance college for their children. "Once people hit their 40s, we see a big spike in the number of loans taken out in the third quarter" — when college tuition bills are due, says Jeanne Thompson, vice president for market insights at Fidelity.

While 13 percent of the childless couples in Fidelity's sample have more than one loan outstanding, the same is true of 18 percent of parents with one child, 22 percent with two children, 21 percent with three children, 35 percent with four children and 39 percent with five or more kids.

Moreover, serial borrowing peaks when the oldest child is between 18 and 23 — or the age associated with college attendance.

Serious Damage to Nest Eggs

While 401(k) loans are a cheap and easy source of credit compared with credit cards and personal loans, Fidelity calculates that those with multiple loans can do serious damage to their nest eggs over the long-run, even if they repay the loans.

Someone who earns $40,000 and receives 4 percent annual raises but takes five loans will amass $298,300 in their 401(k) account after 40 years, calculates Fidelity, assuming a 7 percent annual rate of return and a 6 percent employee contribution rate. That’s 27 percent less than the $405,740 the same person would have had with no loans.